US Airways Defers 54 Airbus Deliveries

[get2flyin]

http://finance.yahoo.com/news/US-Airways-Completes-Major-bw-2771992969.html?x=0&.v=1


For those of us who don't have access to WSJ online.

 

[johnsonrod]

My bet: Republic will end up buying USAirways and Frontier pilots will be senior to everyone but Sully.

 

[BeCareful!]

My bet: Republic will end up buying USAirways and Frontier pilots will be senior to everyone but Sully.

Sounds about right. Sounds like a job for Nicolau!

 

[jmreii]

Cash Preservation for very uncertain future. The industry saw this coming last summer, with every financial move they make it looks more and more like Eastern's shut down part 2.

You are right, it does look like an Eastern shutdown. Don't let them know anything till we get to the end of the line.

 

[Bringupthebird]

Perhaps they are being given such a smoking deal on holding the airplanes that were going to be exchanged (anyone know of an airline in demand for narrowbodies?) that they decided to gamble on a strengthening dollar to buy them cheaper later. Nah!

Never underestimate USAirways' shortsightedness.

I don't see any merger coming along. There's more money to be had financing other plays in the airline sector than to throw more good money after bad. Plus the lessors and credit card companies know what a train wreck any merger with US would be and are keeping their hand on the switch to prevent needless loss.

My prediction is a slow part-out disguised as asset trades (i.e.LGA/DCA swap) until all the good stuff (did I really say that?) is gone and then the gavel will come down on the junk.

The shame is that it doesn't have to be that way. Run a good solid operation and get everyone pulling in the same direction rather than pretending you can substitute playing money games for real leadership.

 

[Colonel Savage]

"The shame is that it doesn't have to be that way. Run a good solid operation and get everyone pulling in the same direction rather than pretending you can substitute playing money games for real leadership."

Well said, Grumpy, and while I agree with you, I'm afraid those days are long gone, never to return.

 

[SF340Guy]

Hey great! 14 months guys. Then what? I think LCC is burning the furniture to keep the house warm.

In their case, I think they may be burning the house to keep the furniture warm. The planes and slots could be very useful, if you could keep the doors open long enough for someone to get a cash position to initiate an asset purchase.

 

[Draginass]

In their case, I think they may be burning the house to keep the furniture warm. The planes and slots could be very useful, if you could keep the doors open long enough for someone to get a cash position to initiate an asset purchase.

But who would want an incoherent airline in disarray and with labor strife at the meltdown point?

 

[General Lee]

This according to Credit Watch and reporter Mike Hinton:

But who would want an incoherent airline in disarray and with labor strife at the meltdown point?

This is what CreditWatch states in an article by Mike Hinton:


On Tuesday, US Airways said it would defer aircraft deliveries from Airbus and obtain new agreements from some of its creditors in order to shore up its balance sheet in 2010 and 2011 -- in the process making it more attractive as a prospective acquisition target, according to one analyst.

"All this keeps US Airways in the game and remain on its quest to merger," wrote bond research firm CreditSights in a Wednesday note, calling UAL Corp. /quotes/comstock/15*!uaua/quotes/nls/uaua (7.27, -0.06, -0.82%) "the logical partner" for such a deal.

However, "negotiation leverage moves more" to UAL, the parent of United Airlines, according to CreditSights.
Airbus invested in US Airways' merger with America West Airlines in 2005 in hopes of scoring a big order, but higher oil prices, troubled credit markets and the recession have so far sidelined such plans, according to CreditSights.

Still, it isn't in the manufacturer's interest to see the Tempe, Ariz., carrier slip over the liquidity edge.
"The industry has relied heavily on secured and unsecured debt financings since oil began to run up in 2Q08," wrote CreditSights. "The theory is that the market will improve and all this debt will get paid down."

For US Airways, "this did not happen and shows how other airlines will get relief if unit revenues do not go back up by 20%, networks expand again, and oil goes back to $30," the bond researcher said.



Bye Bye---General Lee

 

[NuGuy]

Heyas,

I'm not really sure what LCC has left to morgage. The NYC gates/slots were one of the last jems. The VERY last thing I can think of that LCC has is the folio of slots at DCA, which ARE valuable. They do have some Caribiean route authorities.

PHX/LAS are not exactly known for it's high yield customer base. PHL is a great market, but kinda crappy operationally speaking. CLT has never been the strong O&D market needed to make a world class hub like ORD or ATL.

UAL, OTOH, is in a better position. Asia is still Asia, ORD still is a great O&D market, and they still have a pile of GOOD, money making assets if they could get competent management. Linked up with CALs south Pacific and European ops, they could be a killer outfit.

Nu